5 reasons why retirees should buy long-term care insurance (2024)

FAQs

What is the biggest drawback of long-term care insurance? ›

One of the biggest drawbacks of getting long-term care insurance is the risk of losing all the premiums you have paid over the years. If you end up not needing long-term care services, you won't be eligible for coverage.

To protect their assets against the high costs of long term care; to preserve their children's inheritance. To make long term care services affordable, such as home health care and custodial care. To provide themselves with more options than just nursing home care, and to pay for nursing home care if it's needed.

There are a few reasons why it makes sense to consider a policy purchase during this time, including: Affordability: Buying long-term care insurance in your 50s or early 60s typically means lower premiums compared to purchasing it later. Waiting until you're older can significantly increase the cost of coverage.

For someone with a 90-day Elimination Period, the lifetime chance of someone buying coverage at age 60 and using policy benefits was 35%. So, 35% will use their coverage and 65% will not. As you might assume, the decline is because during those first 90 days, some people will recover and some will die.

Income and Assets: You may choose to buy a long-term care policy to protect assets you have accumulated. On the other hand, a long-term care policy is not a good choice if you have few assets or a limited income. Some experts recommend you spend no more than five percent of your income on a long-term care policy.

Who Has Private Long-Term Care Insurance? Among adults age 65 and older, 12.4 percent (or 4.8 million adults) had coverage.

A need for long term care may result from accidents, illnesses, advancing aging, stroke, or other chronic conditions. Cognitive illnesses, such as dementia and Alzheimer's disease are a growing concern for society. Currently, 6.9 million Americans have Alzheimer's and that number continues to grow steadily.

There are multiple events that can trigger long-term care insurance benefits. An inability to complete two of the six activities of daily living for 90 days or longer or a cognitive impairment will typically act as triggers. Also, depending on your policy, the need for standby assistance may be a benefit trigger.

In order to maximize insurability and any potential health rate discounts, we recommend a target age range between 45 and 65. Clients with many chronic illnesses will likely not qualify for long-term care insurance, but they may be insurable for a short-term care insurance policy.

How long do most people use long-term care? ›

In summary, it is not uncommon for someone to receive care at home for several months or longer, followed by a stay of about two and a half years in an assisted living facility, with almost 60% then requiring a nursing home stay of somewhere between about a year and a little over two years (although some may only need ...

Your age is one of the biggest factors that influence how much premiums cost for a long-term care insurance policy. Generally, you can access lower rates if you purchase a policy in your working years, although you may have to pay for the plan longer.

Pre-existing conditions. Insurance providers evaluate each applicant's health status before approving coverage. The requirements differ but having a pre-existing condition makes it almost impossible for you to get long-term care insurance.

The Bottom Line. If you decide that long-term care insurance is the best way to prepare for your later-in-life care needs, there are advantages to buying it before you hit your 60s. You'll not only increase your chance of getting approved but also benefit from a lower rate, in most cases.

Disadvantages of Long-term Goals

Long-term goals can sometimes feel overwhelming, as they require sustained effort and patience, and progress may not be immediately visible. Setting overly ambitious long-term goals can lead to frustration and discouragement if they are not met within the desired timeframe.

Term Life Insurance Pros: It's customizable, specific to your timeline, and usually costs less than whole life insurance. Term Life insurance Cons: If you outlive the term length, your coverage will end and you won't receive any benefits.

Buying LTC insurance is part of a planning process for life and retirement. You need enough income to pay the premiums for the rest of your life regardless of premium increases or life changes, such as the death of your spouse.

Opt for an elimination period

An elimination period is the waiting period before your long-term care insurance coverage kicks in. By selecting a longer elimination period, you can reduce your premiums, as the insurer is taking on less risk with your policy.